CASE LAW REGARDING JOINT AND SEVERAL GUARANTEES.

The recent ruling of 13 April 2016 issued by Supreme Court nº 244/2016 dismissed an appeal for reversal in which the appealing party upheld that the need for the signatures of all the guarantors –three guarantors, one of whom had not signed- could not be regarded as an essential requisite for the existence of a guarantee contract with respect to the two signing guarantors and defendants. The High Court declared “According to the Spanish Civil Code the joint and several guarantee system is founded on the clear consortium-based relationship of the guarantors” projected in the manner of constituting the guarantee, “which implies the need for all the guarantors to sign in order for it to be considered valid”, as otherwise “the special link of severalty does not exist, and consequently, cannot be claimed”.

 

This ruling, along with Ruling no. 808/1996 of 14 October 1996, facilitates a potential basis for case law in relation to this matter.